HOME Reform Act of 2025
- Sponsor
- Rep. Flood, Mike [R-NE-1]
- Committees
- Financial Services Committee (primary)
- Last action
- Oct 31, 2025
Bottom line
This bill aims to increase the supply and accessibility of affordable housing by loosening certain federal restrictions and expanding eligibility for assistance under the HOME program.
What it actually does
The "HOME Reform Act of 2025" amends the Cranston-Gonzalez National Affordable Housing Act to expand eligibility for housing assistance, streamline environmental reviews, and provide greater flexibility for participating jurisdictions in using HOME Investment Partnerships Program funds. It broadens the definition of "low-income families" for certain HOME program purposes to include those up to 100% of median family income, increases the maximum purchase price for HOME-assisted homeownership, and allows HOME funds for infrastructure improvements in nonentitlement areas.
Proponents argue
Supporters argue that the bill will address the critical shortage of affordable housing by reducing regulatory burdens, accelerating project development, and allowing more families to qualify for assistance. They contend that expanding income eligibility and allowing infrastructure funding will make the HOME program more effective and responsive to local needs, particularly in rural and underserved areas.
Opponents contend
Critics might argue that expanding income eligibility to 100% of median family income could dilute resources intended for the lowest-income families, potentially shifting assistance away from those most in need. Concerns could also be raised about the categorical exemptions from environmental review, suggesting it might weaken environmental protections for the sake of development speed.
The bill is relatively short and its provisions are clearly laid out, making it accessible for a reader to understand its core changes within a reasonable timeframe.
Section 2(a)
Defines "Infill Housing Project"
This section adds a new definition for "infill housing project" to the Cranston-Gonzalez National Affordable Housing Act. An infill housing project is a residential project located within a municipality, served by existing utilities, on previously disturbed land of not more than 5 acres, and substantially surrounded by existing development. This definition is crucial for later environmental review exemptions.
Supporters argue
Supporters argue that defining infill housing projects clearly facilitates targeted regulatory relief for development in already-developed areas, promoting efficient land use and reducing sprawl.
Critics contend
No specific opposition is typically raised against definitional changes unless they have immediate, adverse policy implications.
Tradeoffs
Balances the need for clear definitions with potential future implications for regulatory oversight.
Section 2(b)
Expands Income Eligibility for HOME Assistance
This section amends several parts of the Cranston-Gonzalez National Affordable Housing Act to change the income eligibility threshold for certain HOME program assistance. It replaces "low-income families" with "families with a household income that does not exceed 100 percent of the median family income of the area." This significantly broadens the pool of families eligible for HOME rental, homebuyer, and other assistance.
Section 3
Removes Restrictions on Housing Use Choices
This section amends Section 212(a)(2) of the Cranston-Gonzalez National Affordable Housing Act to prevent the Secretary from restricting a participating jurisdiction's choice of eligible housing uses (rehabilitation, new construction, acquisition, etc.) unless explicitly authorized by another specific section (Section 223(2)). This grants more autonomy to local jurisdictions in deciding how to use HOME funds.
Section 4(a)
Allows HOME Funds for Infrastructure in Nonentitlement Areas
This section allows HOME funds to be used for infrastructure improvements (water, sewer, sidewalks, roads, utilities) in jurisdictions that do not receive assistance under Title I of the Housing and Community Development Act of 1974 (i.e., nonentitlement areas). These improvements must be directly related to and located within or immediately adjacent to housing assisted by HOME or Section 42 Low-Income Housing Tax Credits. Labor standards from the HCD Act apply to these improvements.
Section 5
Qualifies Section 8 Units as Affordable Housing
This section adds an exception to the definition of affordable rental housing under the HOME program. It specifies that a rental unit occupied by a tenant receiving Section 8 tenant-based rental assistance qualifies as affordable housing, provided the tenant's contribution does not exceed Section 8 limits and the total rent is approved by the public housing agency. This streamlines the integration of Section 8 with HOME-assisted units.
Section 6(1)(A)
Increases Maximum Purchase Price for HOME-Assisted Homeownership
This section increases the maximum purchase price for HOME-assisted homeownership housing from 95 percent to 110 percent of the median purchase price for the area. This allows more expensive homes to qualify for HOME assistance, reflecting rising housing costs.
Section 6(1)(C)
Encourages Shared Equity Ownership Models for Long-Term Affordability
This section adds a new subparagraph allowing HOME-assisted homeownership to maintain long-term affordability through shared equity ownership models, community land trusts, limited equity cooperatives, community development corporations, or other Secretary-approved mechanisms. This explicitly recognizes and encourages models that preserve affordability for future eligible homebuyers, often through purchase options or rights of first refusal.
Section 6(c)
Exceptions for Military Members and Heirs of Deceased Owners
This section creates two exceptions to HOME homeownership qualifications. It allows participating jurisdictions to suspend or waive income qualifications for military members deployed for 90+ days or with permanent change of station orders. It also allows housing to remain qualified if an heir or beneficiary of a deceased owner assumes the duties, even if they don't meet initial income qualifications.
Section 8
Modifies Recapture and Reuse Rules for CHDO Set-Aside Funds
This section amends the rules for HOME funds reserved for Community Housing Development Organizations (CHDOs). If these funds remain uninvested for 24 months, the Secretary must make them available to the participating jurisdiction for any eligible HOME activities, without regard to whether a CHDO materially participates. This provides more flexibility for jurisdictions to use unspent CHDO funds.
Section 10(a)
Establishes Categorical Exemptions from NEPA Review
This section statutorily exempts several categories of HOME-assisted activities from environmental review under the National Environmental Policy Act (NEPA). These include new construction infill housing projects, acquisition of real property for affordable housing, rehabilitation projects, and new construction projects of 15 units or less. This significantly streamlines the environmental review process for these types of projects.
Section 10(a)
Streamlines Duplicative Environmental Reviews
This section directs the Secretary to ensure that projects already undergoing environmental review are not subjected to duplicative reviews solely due to changes in federal funding sources, provided the project's scope, scale, and location remain substantially unchanged. It also mandates coordination with other federal agencies to streamline inter-agency compliance and recognizes prior reviews by designated entities.
Removes the federal per-unit investment limitation for HOME funds by striking the second sentence of Section 212(e)(1) of the Cranston-Gonzalez National Affordable Housing Act.
Section 4(b)
Why it matters:This is standard legislative practice for amending existing statutory language by striking specific text, rather than an attempt to obscure the provision.
Case for: Proponents argue that per-unit caps are often outdated and do not reflect the true cost of housing development in many markets, especially high-cost areas. Removing the cap allows jurisdictions to use HOME funds more effectively to meet local needs and enable projects that were previously infeasible.
Case against: Opponents might argue that removing per-unit caps could lead to less efficient use of funds, potentially supporting fewer units overall or allowing for inflated development costs without sufficient oversight, thereby reducing the overall impact of the program.
Estimated impact: Could significantly increase the amount of HOME funds allocated per housing unit in high-cost areas, potentially enabling more complex or expensive projects.
Removes the expiration date for a participating jurisdiction's right to draw down HOME Investment Trust Funds by striking subsection (g) of Section 218 of the Cranston-Gonzalez National Affordable Housing Act.
Section 7
Why it matters:This is a technical amendment to remove a sunset provision, which is a common legislative drafting technique and not necessarily intended to be evasive.
Case for: Proponents argue that expiration dates can force jurisdictions to rush projects or make less optimal decisions to avoid losing funds. Removing the deadline allows for better project planning and execution, leading to more strategic and effective use of funds.
Case against: Critics might argue that removing expiration dates could lead to funds sitting idle for longer periods, delaying the delivery of affordable housing and reducing the overall efficiency and accountability of the program.
Estimated impact: Provides greater financial management flexibility for all participating jurisdictions, potentially reducing the amount of unspent funds returned to the Treasury.
Increases the income threshold for families for whom information on asset recycling is disseminated from 95 percent to 110 percent of the median purchase price, aligning with other eligibility changes in the bill.
Section 9
Why it matters:This is a conforming amendment to align with other policy changes in the bill, a standard legislative practice.
Case for: Supporters argue this aligns the information dissemination with the expanded eligibility for homeownership assistance, ensuring more families are aware of relevant programs and opportunities.
Case against: No specific opposition is typically raised against such conforming amendments, as they ensure consistency across related provisions.
Estimated impact: Minor expansion of information dissemination to a slightly broader income group, with limited direct fiscal impact.
Limits the application of Build America, Buy America Act requirements to only infrastructure improvements funded under the new Section 212(a)(4) using HOME funds, rather than all HOME-assisted activities.
Section 11 (Section 291)
Why it matters:This is a specific carve-out from a broader federal policy, which can be politically sensitive. Placing it in a new, distinct section at the end might be a way to clearly define its scope without altering the core text of the Build America, Buy America Act itself.
Case for: Proponents argue that applying Buy America requirements broadly to all housing construction can increase costs and delays, especially for smaller projects. Limiting them to infrastructure ensures a balance between promoting domestic manufacturing and facilitating affordable housing production.
Case against: Advocates for domestic manufacturing might argue that this provision weakens the intent of the Build America, Buy America Act by carving out significant portions of federally funded housing construction from its requirements, potentially reducing job creation in domestic industries.
Estimated impact: Reduces compliance costs and potential delays for most HOME-assisted housing construction projects, while still applying Buy America to new infrastructure investments.
Exempts activities involving the rehabilitation, construction, or development of 50 or fewer dwelling units from Section 3 of the Housing and Urban Development Act of 1968, for State recipients or small participating jurisdictions (receiving less than $3M in HOME funds).
Section 11 (Section 292)
Why it matters:This is a significant policy exemption from a long-standing federal requirement aimed at economic opportunity. Placing it as a new, distinct section at the end clarifies its scope and avoids direct amendment of the Section 3 statute itself.
Case for: Proponents argue that Section 3 compliance can be overly complex and burdensome for small projects and small jurisdictions, hindering affordable housing development. This exemption streamlines the process for smaller-scale efforts, allowing them to proceed more quickly and efficiently.
Case against: Advocates for economic equity might argue that exempting small projects, even if individually minor, could cumulatively reduce opportunities for low-income individuals and businesses, undermining the social equity goals of Section 3, which aims to direct economic benefits to those most in need.
Estimated impact: Reduces administrative burden for small-scale housing projects and small jurisdictions, potentially accelerating development, but may reduce targeted economic opportunities for low-income individuals and businesses on these projects.